Cheap mortgages 'not available with low deposits'

Borrowers with small deposits are paying substantially more for mortgages than in the recent past, it has been reported.

According to David Black, banking specialist at Defaqto, there are still relatively few cheap mortgages for homebuyers with a low cash sum.

He noted that three years ago there was little difference in the interest rates charged whether you had a ten or 25 per cent deposit.

"Since the credit crunch the situation has changed significantly and those seeking a higher loan-to-value LTV mortgage have to pay significantly more," Mr Black stated.

"The keenest rates are for those seeking a mortgage of less than 75 per cent LTV. Mortgages permitting 90 per cent LTV are significantly more expensive."

He said that first-time buyers are particularly hard hit as they need a substantial deposit merely to get on the housing ladder.

Earlier this week, the Council of Mortgage Lenders reported that gross mortgage lending rose by 24 per cent in March 2010.

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2010-04-20 13:36:00 © Moneyextra.com